Embattled crypto nomad and former founder of crypto exchange FTX Sam Bankman-Fried, who built his empire largely by selling his philanthropic face, was finally arrested by Bahamian authorities on Monday evening.
It became possible after the United States Attorney for the Southern District of New York reached an understanding with the Bahamian government, setting the stage for extradition and the US trial of the entrepreneur.
As per law, Bankman-Fried is expected to testify virtually before the House Financial Services Committee on Tuesday. He, however, remained defiant not to do so. His attorneys told CNBC that he won’t testify.
His arrest is the first concrete move by regulators to hold individuals accountable for the multi-billion-dollar implosion of FTX last month.
Barely two days ago, a visibly anxious Sam Bankman-Fried admitted that the possibility of arrest haunted him.
Amid fears of arrest, Sam Bankman-Fried shrewdly put up a nonchalant front. As US federal agencies moved to investigate allegations, the disgraced entrepreneur spoke to the media from his luxury complex in the Bahamas.
The 30-year-old entrepreneur then said he desired to launch a new business to mint enough money to pay back victims of the FTX collapse.
By now, it became clear that Sam Bankman-Fried unlike most other Silicon Valley tycoons earlier masqueraded as the champion of Effective Altruism to dupe his investors and customers who were made to believe in his convincing words.
Sam Bankman-Fried is now under scanner for dubious handling of his crypto firm FTX’s funds.
In his usual tone, the billionaire had refuted allegations against him.
Bankman-Fried founded the digital currency agency FTX in 2019 where people could trade bitcoins and other cryptocurrencies. Its worth dropped from $16bn (£13bn) to zero. Consequently, the firm collapsed.
We’re keeping track of everything that happened so far.
Here’s the timeline of events to help keep you abreast of the happenings surrounding Sam Bankman-Fried and his collapsed crypto empire.
December 14, 2022: Sam Bankman-Fried charged with fraud, conspiracy
Sam Bankman-Fried, the founder of FTX, has been charged with eight criminal offences, including conspiracy and wire fraud, according to an indictment by the U.S. attorney's office. He was arrested in the Bahamas on Monday and appeared in court there on Tuesday. John J. Ray III, the new CEO of FTX, testified before the House Financial Services Committee and provided new information about the company's internal investigation. The Securities and Exchange Commission also charged Bankman-Fried with defrauding investors in FTX on Tuesday.
December 12, 2022: Sam Bankman-Fried arrested in the Bahamas
Sam Bankman-Fried was arrested in the Bahamas on Monday over criminal charges against him, a statement from the government of the Bahamas said.
The Southern District of New York, which is investigating Bankman-Fried and the collapse of FTX and its sister trading firm Alameda, confirmed his arrest on Twitter.
“Earlier this evening, Bahamian authorities arrested Samuel Bankman-Fried at the request of the US government, based on a sealed indictment filed by the SDNY,” wrote US attorney Damian Williams.
December 10, 2022: Sam Bankman-Fried said he wants to launch a new business to pay back his customers
In an interview with the BBC from the Bahamas, Sam Bankman-Fried showed his desperation to start a new business to help his customers. The disgraced entrepreneur said he wants to “give anything” to be able to begin a new venture in order to recoup his users’ lost investments.
“I’m going to be thinking about how we can help the world, and if users haven’t gotten much back, I’m going to be thinking about what I can do for them,” Bankman-Fried told the BBC. “And I think at the very least I have a duty to FTX users to do right by them as best as I can.”
When asked whether he would start a new business to pay investors back, he said: “I would give anything to be able to do that. And I’m going to try if I can.”
28 November 2022: Crypto lender Blockfi files for bankruptcy
Crypto platform BlockFi files for Chapter 11 Bankruptcy in New Jersey, citing exposure to FTX as a major factor in their collapse. In its press release, the firm said that it was deeply hurt by the FTX collapse because its exposure to FTX created a liquidity crisis.
November 22, 2022: Specifics of the finances behind SBF's empire begin to emerge as bankruptcy proceedings move forward
FTX representatives said they have located $1.4 billion worth of assets, but cautioned it may take several more weeks to establish a complete balance sheet. Tax filings also reveal that FTX and Alameda Research collectively lost $3.7 billion between 2019 and 2021, long before the current debacle, suggesting things were never going as well in the SBF empire as it may have appeared.
November 17, 2022: New FTX CEO blames the failure of corporate control
In a bankruptcy court filing, new FTX CEO Ray says: "Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here. From compromised systems integrity and faulty regulatory oversight abroad to the concentration of control in the hands of a very small group of inexperienced, unsophisticated, and potentially compromised individuals, this situation is unprecedented."
11 November 2022: The nail in the coffin, Sam Bankman-Fried resigns
Within a few hours of winding down operations in its trading firm, Alameda Research, 11 November marked the last day of the FTX collapse. In a formal press release, FTX announced that it is finally filing for Chapter 11 of the United States Bankruptcy Code to begin an orderly process to review and monetize the remaining assets of the firm for the benefit of all global stakeholders in the company. FTX founder Sam Bankman-Fried also resigned from his role as the CEO of the company and stated that he will ‘assist in the orderly transition. John Ray III was appointed as the new CEO and is reported to be the same individual who previously oversaw the Enron Corporation bankruptcy of 2001
November 10, 2022: SBF announces that Alameda Research will shut down
Regulators in the Bahamas freeze FTX assets. The entire staff of the Effective Altruism-inspired FTX Future Fund, which had committed $160 million in funds to various projects, resigns.
November 7, 2022: Sam Bankman-Fried says all is well
FTX owner Sam Bankman-Fried denied any crisis and said there was nothing wrong with the crypto exchange and that assets were safe.
November. 9: Binance backs out of the proposed bailout deal
Binance quickly pulled out of the proposed deal after a “corporate due diligence” review revealed issues in FTX’s financial situation that Binance said were “beyond our control or ability to help.”
November 6, 2022: Binance announces bailout bid
Crypto giant Binance signed a nonbinding agreement on Tuesday to buy FTX's non-U.S. unit to help cover a "liquidity crunch" at the rival exchange, in a stunning bailout that raised fresh concerns among investors about cryptocurrencies.